Question
In: Finance
Using the table of probabilities and returns for a stock mutual fund, what is the mutual...
Using the table of probabilities and returns for a stock mutual fund, what is the mutual fund's expected return?
|
State |
Probability |
Return |
|
Depression |
0.05 |
-20% |
|
Recession |
0.25 |
-5% |
|
Normal |
0.5 |
8% |
|
Boom |
0.2 |
30% |
Multiple Choice
-
9.15%
-
10.25%
-
7.75%
-
8.00%
Solutions
Expert Solution
Expected return=Respective return*Respective probability
=(0.05*-20)+(0.25*-5)+(0.5*8)+(0.2*30)
which is equal to
=7.75%
jeff jeffy answered 2 years agoRelated Solutions
The stock has the following returns and probabilities of those returns. What is the expected return...
The stock has the following returns and probabilities of those
returns. What is the expected return and risk of the stock using
the data? Use your knowledge (weighted average of returns to
calculate expected return and standard deviation of returns to
calculate risk).
return
probability
6%
70%
15%
30%
Also, How do you calculate portfolio beta? I have this problem
and have not been able to calculate the correct answer.
Using the table below what is the beta of the...
You are operating a mutual fund which today has $100mil in assets. Your returns and fund...
You are operating a mutual fund which today has $100mil in
assets. Your returns and fund flows into/out of the fund are listed
below.
Time =
Return
Fund Flow $Mil
1
20.00%
5
2
10.00%
3
3
-30.00%
-10
4
10.00%
4
5
-5.00%
-2
Question 1: What is the arithmetic average (mean) of the
returns?
Question 2: What is the geometric average (mean) of the
returns?
Question 3: What is the dollar-weighted average (mean) of the
returns?
You are operating a mutual fund which today has $100mil in assets. Your returns and fund...
You are operating a mutual fund which today has $100mil in
assets. Your returns and fund flows into/out of the fund are listed
below.
Time =
Return
Fund Flow $Mil
1
20.00%
5
2
10.00%
3
3
-30.00%
-10
4
10.00%
4
5
-5.00%
-2
What is the dollar-weighted average (mean) of the returns?
Discuss the Mutual Fund Industry and their role in the stock market.
Discuss the Mutual Fund Industry and their role in the stock
market.
A pension fund manager is considering three mutual funds. The first is a stock fund,...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The stock fund has an expected return of 15% and a standard deviation of 23%. The bond fund has an expected return of 9% and a standard deviation of 23%. The correlation between the fund returns is.15. a) What...
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a sure rate of 5.5%. The probability distributions of
the risky funds are:
Expected Return
Standard Deviation
Stock fund (S)
16%
45%
Bond fund (B)
7%
39%
The correlation between the fund returns is 0.0385.
What is the expected return and standard deviation for...
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a sure rate of 5.5%. The probability distributions of
the risky funds are:
Expected Return
Standard Deviation
Stock fund (S)
16%
45%
Bond fund (B)
7%
39%
The correlation between the fund returns is 0.0385.
What is the expected return and standard deviation for...
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a sure rate of 4.7%. The probability distributions of
the risky funds are:
Expected Return
Standard Deviation
Stock fund (S)
17%
37%
Bond fund (B)
8%
31%
The correlation between the fund returns is 0.1065.
What is the Sharpe ratio of the best feasible...
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a rate of 8%. The probability distribution of the risky
funds is as follows:
Expected Return
Standard Deviation
Stock fund (S)
17
%
30
%
Bond fund (B)
11
22
The correlation between the fund returns is 0.10.
a-1. What are the investment proportions...
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a sure rate of 5.8%. The probability distributions of
the risky funds are:
Expected Return Standard Deviation
Stock fund (S) 19% 48%
Bond fund (B) 9% 42%
The correlation between the fund returns is 0.0762.
What is the Sharpe ratio of the best feasible...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe the espoused values of a company you have worked for (or been exposed to -...
- Can you explain to me the differnces in how we paid for the health care (access...
- Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure...
- Write a java code that could be used to show the simulation of a tornado. use...
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
ADVERTISEMENT